Can News Corp.’s iPad publication The Daily succeed from behind a wall?

Sources who have seen News Corp.’s iPad newspaper, The Daily, tell All Things Digital’s Peter Kafka that the app is “both old fashioned and cutting edge.” In that way, it sounds a lot like Rupert Murdoch, a man with newspaper ink for blood but who, for example, saw the potential for satellite television way before others did.

As The Daily prepares for its hoopla-filled launch Wednesday at the Guggenheim Museum in New York, pundits are debating the app’s chances in a news-soaked marketplace, and details are leaking out. For example, The Poynter Institute’s Damon Kiesow has amassed a partly speculative, but fairly exhaustive list of the publication’s editorial staff, which includes former employees of the New York Post, the Associated Press, The Atlantic, AOL News, and lots of other national publications.

Kafka says The Daily is “almost defiantly anti-Web,” given its standalone nature, its lack of aggregation, and its barebones Web site, which will be free but will feature only a “grudging sample” of about 10 of the day’s stories. The actual iPad version of The Daily is apparently very newspaper-like, though, with six sections and an early morning, once-daily publication schedule (though there apparently will be some minimal midday updating). It will cost 99 cents per week, although the first two weeks after Wedneday’s launch will be free as a promotion.

Some of The Daily’s stories, according to people who have seen the app, look like any other newspaper story, but others – some of them with no text at all – are graphics-heavy and sport interactive capabilities like a zoom function. Reportedly, the app will feature 3D video, but that’s apparently coming sometime down the line.

Much is made of The Daily’s walled-off nature. Some critics have said this will be its downfall. And it could be. But it’s also the case that people who work online (like media pundits and journalists) tend to think of everyone else as reading news online all day, too. It could be that there is a large audience for a single daily online publication.

If so, it has to be high quality, argues news industry analyst Ken Doctor. “Our time is lots more valuable than 99 cents a week,” he writes, “and reading The Daily means adding a new daily habit, replacing some other news reading, we’d think, or some other activity to be sure. To displace other habits, newsy and otherwise, it must compel our attention.”

Doctor notes that events in Egypt this week will provide the perfect test for Murdoch’s insistence on publishing once a day with minimal updates. “If it has yesterday’s Egypt news, as the revolution goes down, it will read like yesterday’s paper, while CNN excels live from the street. That’s the advantage the Journal, the Times and every newspaper has — a print compilation still valuable as a package to tens of millions and the ability to do continually updated news.”

Given the public-relations blitz, the app’s unprecedented endorsement by, and promotional help from, Apple and the ease of subscribing via iTunes, The Daily is almost certain to do well at first. But Doctor, like Kafka, wonders what will happen when the buzz dies down. Again, the app’s walled-off nature comes into play here: most online media marketing is based on Web search and referrals from Facebook and Twitter links. How will those things work with The Daily? And “what might it do with a Flipboard?” Doctor asks.

Clayton Morris of the News Corp.-owned Foxnews.com has five wishes for his sister publication’s app — nearly all of them to do with his desire for links to outside publications, the ability to tweet articles, etc. But it seems Murdoch is betting that there is a substantial audience of non-tweeters out there — people who just want to sit back and read the news without feeling the need to go hopping around online.